A new study conducted by the Australian Council of Social Service (ACOSS) has discovered that two tax benefits are favoring the wealthiest individuals in Australia and exacerbating the housing affordability issue.
The report specifically points out the capital gains tax discount on property sales, where only half of the capital gains from an asset sale are subject to tax, and negative gearing, which permits investors to deduct investment expenses from their income.
ACOSS’s research reveals that the top 10% of households, who own the majority of investment properties, are benefiting the most from these tax breaks, receiving 82% of the total $16 billion tax relief provided by these incentives.
The government’s housing policies include 1.2 million new homes built by mid-2029, a $9.3 billion agreement with states and territories to support social housing and homelessness services, a scheme to help 40,000 households purchase a new or existing home, and tax incentives to support investment in new build-to-rent developments.
One of those latter tax incentives includes increasing the capital works tax discount depreciation rate from 2.5 per cent to four per cent.
